Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is adjusted for the dilutive effects of stock options, warrant, and restricted stock. The diluted average number of common shares outstanding has been increased for the assumed exercise of stock options, warrant, and restricted stock with proceeds used to purchase treasury shares at the average market price for the period. The computations are as follows for the three and six months ended June 30, 2012 and 2011 (dollars in thousands, except share and per share data):

			For the Three Months				For the Six Months
				Ended June 30,			Ended June 30,
		2012			2011	2012		2011

Income from continuing operations	$	1,987			2,023	4,264		3,501
Income from discontinued operations, net of tax		-			(31)	-		793
Net income	$	1,987			1,992	4,264		4,294

Weighted average number of shares outstanding used in the calculation of basic earnings per common share		6,713,847			6,689,743	6,710,062		6,689,743

Add dilutive effect of:
Stock options		9,606			4,476	8,292		4,188
Stock warrant		66,323			52,572	63,260		50,444
		75,929			57,048	71,552		54,632

Adjusted weighted average number of shares outstanding used in the calculation of diluted earnings per common share		6,789,776			6,746,791	6,781,614		6,744,375

Basic earnings per common share:
Continuing operations	$	0.30			0.30	0.64		0.52
Discontinued operations		-			-	-		0.12

Diluted earnings per common share:
Continuing operations	$	0.29			0.30	0.63		0.52
Discontinued operations		-			-	-		0.12